Exhibit 10.1
DATED AS OF May 23, 1996
GOLDEN QUEEN MINING CO. LTD.
- and -
MONTREAL TRUST COMPANY OF CANADA
______________________________
WARRANT INDENTURE
Providing for the Issue of up to
[2,750,000] Warrants
______________________________
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
Vancouver, B.C.
STIKEMAN, ▇▇▇▇▇▇▇
Vancouver, B.C.
TABLE OF CONTENTS
1. INTERPRETATION 1
1.1 Definitions 1
1.2 Words Importing Gender and Number 5
1.3 Interpretation Not Affected by Headings 5
1.4 Day Not a Business Day 5
1.5 Time of the Essence 5
1.6 Applicable Law 5
1.7 Meaning of "outstanding" for Certain Purposes 5
2. ISSUE OF WARRANTS 6
2.1 Issue of Warrants 6
2.2 Terms of Warrants 6
2.3 Warrant Certificates 6
2.4 Issue in Substitution for Lost Warrants 7
2.5 Warrantholder not a Shareholder 8
2.6 Warrants to Rank Pari Passu 8
2.7 Signing of Warrants 8
2.8 Certification by the Trustee 8
3. EXCHANGE AND OWNERSHIP OF WARRANTS 9
3.1 Exchange of Warrants 9
3.2 Charges for Exchange 9
3.3 Ownership of Warrants 9
3.4 Registration and Transfer of Warrants 9
4. EXERCISE OF WARRANTS 11
4.1 Method of Exercise of Warrants 11
4.2 Effect of Exercise of Warrants 12
4.3 No Fractional Common Shares 12
4.4 Expiration of Warrants 12
4.5 Accounting and Recording 13
5. ADJUSTMENT OF EXCHANGE NUMBER 13
5.1 Definitions 13
5.2 Adjustment of Exchange Number 13
5.3 Subscription Rights Adjustment Rules 17
5.4 Postponement of Subscription 18
5.5 Notice of Certain Events 18
6. RIGHTS AND COVENANTS 18
6.1 Company May Purchase 18
6.2 General Covenants of the Company 18
6.3 Trustee's Remuneration and Expenses 19
6.4 Performance of Covenants by Trustee 20
7. ENFORCEMENT 20
7.1 Suits by Warrantholders 20
7.2 Immunity of Shareholders 20
7.3 Limitation of Liability 20
8. MEETINGS OF WARRANTHOLDERS 20
8.1 Right to Convene Meetings 20
8.2 Notice 21
8.3 Chairman 21
8.4 Quorum 21
8.5 Power to Adjourn 21
8.6 Show of Hands 21
8.7 Poll 22
8.8 Voting 22
8.9 Regulations 22
8.10 Company and Trustee may be Represented 22
8.11 Powers Exercisable by Extraordinary Resolution 23
8.12 Meaning of "Extraordinary Resolution" 23
8.13 Powers Cumulative 24
8.14 Minutes 24
8.15 Instruments in Writing 25
8.16 Binding Effect of Resolutions 25
8.17 Holdings by Company Disregarded 25
9. SUPPLEMENTAL INDENTURES AND SUCCESSOR COMPANIES 25
9.1 Provision for Supplemental Indentures
for Certain Purposes 25
9.2 Successor Companies 26
10. CONCERNING THE TRUSTEE 26
10.1 Trust Indenture Legislation 26
10.2 Rights and Duties of Trustee 27
10.3 Evidence, Experts and Advisers 27
10.4 Securities, Documents and Monies Held by Trustee 28
10.5 Action by Trustee to Protect Interests 28
10.6 Trustee Not Required to Give Security 28
10.7 Protection of Trustee 29
10.8 Replacement of Trustee 30
10.9 Conflict of Interest 30
10.10 Acceptance of Trust 31
11. GENERAL 31
11.1 Notice to Company, Trustee and Underwriters 31
11.2 Notice to Warrantholders 33
11.3 Satisfaction and Discharge of Indenture 33
11.4 Sole Benefit of Parties and Warrantholders 33
11.5 Counterparts and Formal Date 34
THIS WARRANT INDENTURE is dated as of May 23, 1995 and made
BETWEEN
GOLDEN QUEEN MINING CO. LTD., a British Columbia company having its
registered and records office at 1600 - ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(the "Company")
AND
MONTREAL TRUST COMPANY OF CANADA, a trust company incorporated under the
laws of Canada and having an office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(the "Trustee")
WHEREAS:
A. The Company proposes to issue warrants exercisable by the holder on the
terms hereinafter set out for the acquisition of common shares in the capital
of the Company;
B. The Company is duly authorized to create and issue the Warrants to be
issued as herein provided;
C. All things necessary have been done and performed to make the Warrants,
when certified by the Trustee and issued as in this Indenture provided,
legal, valid and binding upon the Company with the benefits of and subject to
the terms of this Indenture; and
D. The Trustee has agreed to enter into this Indenture and to hold all
rights, interests and benefits contained herein for and on behalf of those
persons who become holders of Warrants from time to time issued pursuant to
this Indenture;
NOW THEREFORE THIS INDENTURE WITNESSES that in consideration of the premises
and the covenants of the parties, the Company hereby appoints the Trustee as
trustee for the Warrantholders (as hereinafter defined) to hold all rights,
interests and benefits contained herein for and on behalf of those persons
who are holders of Warrants from time to time issued pursuant to this
Indenture and it is hereby agreed and declared as follows:
1. INTERPRETATION
1.1 Definitions
In this Indenture, unless there is something in the subject matter or context
inconsistent therewith:
(a) "Accredited Investor" has the meaning given to that term in Regulation
D;
(b) "Applicable Legislation" means the provisions of the statutes of Canada
and its provinces and territories and the regulations under those
statutes relating to trust indentures or the rights, duties or
obligations of corporations and trustees under trust indentures as are
from time to time in force and applicable to this Indenture;
(c) "business day" means a day that is not a Saturday, Sunday, or civic or
statutory holiday in Vancouver, British Columbia;
(d) "Common Shares" means the fully paid and non-assessable common shares
without par value in the capital of the Company, as constituted as at
the date hereof, provided that if the exchange rights are subsequently
adjusted or altered pursuant to subsections 5.2.4 or 5.2.5, "Common
Shares" shall thereafter mean the shares or other securities or property
to which a Warrantholder is entitled on an exchange after such
adjustment or alteration;
(e) "Company" means Golden Queen Mining Co. Ltd. and its lawful successors
from time to time;
(f) "Company's auditors" means the firm of chartered accountants duly
appointed as auditors of the Company from time to time;
(g) "Convertible Security" means a security of the Company (other than the
Warrants or the Special Warrants) convertible into or exchangeable for
or otherwise carrying the right to acquire Common Shares;
(h) "counsel" means a barrister or solicitor (who may be an employee of the
Company) or a firm of barristers and solicitors (who may be counsel for
the Company) in any case acceptable to the Trustees, acting reasonably;
(i) "Current Market Price" of the Common Shares at any date means the price
per Common Share equal to the weighted average price at which the Common
Shares have traded on such stock exchange upon which such shares are
listed (or if listed on more than one stock exchange, on the stock
exchange on which the greatest volume of Common Shares is traded) during
any 30 consecutive trading days, selected by the Company with the
approval of the Trustee, within the 45 trading day period before that
date;
(j) "directors" means the directors of the Company for the time being, and
reference without more to "action by the directors" means action by the
directors of the Company as a board or by a duly empowered executive
committee of the board;
(k) "dividends paid in the ordinary course" means dividends (payable in cash
or in securities, property or assets) declared payable on the Common
Shares in any.fiscal year of the Company to the extent that those
dividends, in the aggregate, do not exceed in amount or value the
greatest of:
(i) 150% of the aggregate amount of dividends paid on the Common Shares
in the 12 months immediately preceding that fiscal year;
(ii) 50% of the consolidated net earnings of the Company, before
extraordinary items, for the 12 months immediately preceding that
fiscal year shown in the consolidated financial statements of the
Company; and
(iii) 5% of the average amount at which the Common Shares are carried on
the books of the Company during that fiscal year;
and for such purpose the amount of any dividends paid other than in cash
shall be the fair market value of the dividends as determined by the
directors;
(l) "Exchange Number" means, at any time, that number of Common Shares that
Warrantholders are entitled to receive for each Warrant held upon
exercise of the rights attached to the Warrant as the number may be
adjusted by Article 5 (such number being equal to one Common Share for
each Warrant at the date hereof);
(m) "Exercise Date" with respect to any Warrant means the date on which
Common Shares are issued pursuant to section 4.2;
(n) "extraordinary resolution" has the meaning given in sections 8.12 and
8.15;
(o) "Original U.S. Purchaser" means a Qualified Institutional Buyer ^ that
purchased Special Warrants from ^ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Partners (USA), Inc.
^ pursuant to Rule 144A under the U.S. Securities Act or an Accredited
Investor that purchased Special Warrants from the Company under Section
4(2) in either case on the date of this Indenture;
(p) "person" means an individual, a corporation, a partnership, a trustee or
any unincorporated organization, and words importing persons have a
similar meaning;
(q) "Qualified Institutional Buyer" has the meaning given in Rule 144A under
the U.S. Securities Act;
(r) "Regulation D" means Regulation D promulgated under the U.S. Securities
Act;
(s) "Regulation S" means Regulation S promulgated under the U.S. Securities
Act;
(t) "shareholder" means an owner of record of one or more Common Shares or
shares of any other class or series of the Company;
(u) "Special Warrant Indenture" means the indenture between the Company and
the Trustee of even date herewith providing for the creation and
issuance of an aggregate of [5,500,000] special warrants;
(v) "Special Warrants" means the special warrants created by the Company and
issued pursuant to the Special Warrant Indenture;
(w) "Subscription Price" means $2.90;
(x) "subsidiary of the Company" means a corporation, a majority of the
outstanding voting shares of which is owned, directly or indirectly, by
the Company or by one or more subsidiaries of the Company; and, as used
in this definition, "voting shares" means shares of a class or classes
ordinarily entitled to vote for the election of a majority of the
directors of a corporation irrespective of whether or not shares of any
other class or classes shall have or might have the right to vote for
directors by reason of the happening of any contingency;
(y) "this Warrant Indenture", "this Indenture", "herein", "hereby" and
similar expressions mean or refer to this Warrant Indenture and any
indenture, deed or instrument supplemental or ancillary hereto; and the
expressions "Article", "section" or "subsection" followed by a number or
letter mean and refer to the specified Article, section or subsection of
this Indenture;
(z) "Time of Expiry" means 4:00 p.m. ^(Vancouver time) on November 28, 1997;
(aa) "trading day" with respect to a stock exchange means a day on which the
stock exchange is open for business;
(bb) "Transfer Agent" means the transfer agent ^ of the Common Shares;
(cc) "Trustee" means Montreal Trust Company of Canada, or any lawful
successor thereto including through the operation of section 10.8;
(dd) "United States" means the United States of America, its territories and
possessions, any state of the United States and the District of
Columbia;
(ee) "U.S. Person" has the meaning given to that term in Regulation S under
the U.S. Securities Act;
(ff) "U.S. Securities Act" means the United States Securities Act of 1933, as
amended;
(gg) "Warrant Certificates" means the certificates substantially in the form
attached as Schedule A hereto, or such other form as may be approved
under subsection 2.3.1, evidencing Warrants;
(hh) "Warrantholders" or "holders" means the registered holders of Warrants
for the time being;
(ii) "Warrantholders' Request" means an instrument signed in one or more
counterparts by Warrantholders entitled to purchase in the aggregate not
less than 10% of the aggregate number of Common Shares that could be
acquired pursuant to the exercise of all the Warrants then outstanding
requesting the Trustee to take some action or proceeding specified
therein; and
(jj) "Warrants" means the warrants authorized to be created by the Company
under subsection 2.1.1 and issued and certified under this Indenture
entitling the holders to acquire Common Shares and for the time being
outstanding and includes warrants evidenced by Warrant Certificates;
(kk) "written order of the Company", "written request of the Company",
"written consent of the Company" and "certificate of the Company" mean
respectively a written order, request, consent and certificate signed in
the name of the Company by any one or more of the President and Chief
Executive Officer and the ^ Vice-President - Administration of the
Company and may consist of one or more instruments so executed and any
other documents referred to herein which is required or contemplated to
be provided or given by the Company is a document signed on behalf of
the Company by any one or more of such officers.
1.2 Words Importing Gender and Number
Words importing gender and number shall be read with such changes as the
context may require.
1.3 Interpretation Not Affected by Headings
The division of this Indenture into Articles, sections, subsections and
paragraphs, the provision of a table of contents and the insertion of
headings are for convenience of reference only and shall not affect the
construction or interpretation of this Indenture.
1.4 Day Not a Business Day
In the event that any day on which the Exercise Period expires or on or
before which any action is required to be taken hereunder is not a business
day, then the Exercise Period shall expire on or the action shall be required
to be taken on or before the next succeeding day that is a business day.
1.5 Time of the Essence
Time shall be of the essence in all respects in this Indenture, the Warrants
and the Warrant Certificates.
1.6 Applicable Law
This Indenture, the Warrants and the Warrant Certificates shall be construed
and enforced in accordance with the laws of the Province of British Columbia
and shall be treated in all respects as British Columbia contracts.
1.7 Meaning of "outstanding" for Certain Purposes
Every Warrant Certificate countersigned and delivered by the Trustee
hereunder shall be deemed to be outstanding until it has been surrendered to
the Trustee pursuant to this Indenture, provided however that:
(a) a Warrant Certificate that has been partially exchanged shall be deemed
to be outstanding only to the extent of the unexchanged part of the
Warrants;
(b) where a Warrant Certificate has been issued in substitution for a
Warrant Certificate that has been lost, stolen or destroyed, only one of
them shall be counted for the purpose of determining the Warrants
outstanding; and
(c) for the purpose of any provision of this Indenture entitling holders of
outstanding Warrants to vote, sign consents, requests or other
instruments or take any other action under this Indenture, Warrants
owned legally or equitably by the Company or any subsidiary of the
Company shall be disregarded, except that:
(i) for the purpose of determining whether the Trustee shall be
protected in relying on any vote, consent, request or other
instrument or other action, only the Warrants of which the Trustee
has notice that they are so owned shall be so disregarded; and
(ii) Warrants so owned that have been pledged in good faith other than
to the Company or any subsidiary of the Company shall not be so
disregarded if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right to vote the Warrants in its discretion
free from the control of the Company or any subsidiary of the
Company pursuant to the terms of the pledge.
2. ISSUE OF WARRANTS
2.1 Issue of Warrants
2.1.1 A total of [2,750,000] Warrants entitling the holders thereof to
acquire from the Company on exercise thereof, subject to the
conditions in Article 4 and adjustment to the Common Shares as
provided for in Article 5, up to an aggregate of [2,750,000] Common
Shares are hereby authorized to be issued by the Trustee on behalf
of the Company. Such Warrants shall be issued pursuant to and in
accordance with the terms of the Special Warrant Indenture.
2.1.2 Certificates for Warrants issued pursuant to subsection 2.1.1 shall
be executed by the Company and certified by or on behalf of the
Trustee and delivered by the Company in accordance with section
2.3.
2.2 Terms of Warrants
2.2.1 Subject to the provisions of Articles 4 and 5, each of the Warrants
issued hereunder shall entitle the holder thereof to acquire from
the Company upon payment of the Subscription Price, at any time
prior to the Time of Expiry, the number of Common Shares equal to
the Exchange Number in effect at the Exercise Date.
2.2.2 Fractional Warrants shall not be issued or otherwise provided for.
2.3 Warrant Certificates
2.3.1 Warrants shall be issued in registered form only and shall be
evidenced only by Warrant Certificates, which shall be
substantially in the form attached as Schedule A hereto or in such
other form not inconsistent with this Indenture as may be approved
by the Company and the Trustee, shall be dated as of the date
hereof (regardless of their actual dates of issue), shall bear such
distinguishing letters and numbers as the Company shall with the
approval of the Trustee prescribe and may, if required, be prepared
in both the English and French languages.
2.3.2 The Trustee shall maintain and make available to the Company lists
of all persons who are entitled to Warrant Certificates, and the
Trustee shall mail or deliver Warrant Certificates evidencing whole
Warrants to the Underwriters or those persons.
2.3.3 Unless the Warrants have been registered under the U.S. Securities
Act, Warrants issued to an Original U.S. Purchaser and any
transferee of such Warrants who is a U.S. Person or a person in the
United States in accordance with subsection 3.4.2 of the Special
Warrant Indenture, shall bear the following ^ legend:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED
(THE "U.S. SECURITIES ACT"), AND MAY BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE
UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S
UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH ANY
APPLICABLE SECURITIES LAWS, (C) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE
144A OR BY RULE 144 THEREUNDER, IF APPLICABLE, AND IN
COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (D)
WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY, PURSUANT TO
ANOTHER EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES
ACT AND ANY APPLICABLE STATE SECURITIES LAWS."
2.3.4 ^ If, at the time of issue of any of the Warrants, there are
restrictions on resale under applicable securities legislation on
such Warrants, the Company may, on the advice of counsel, endorse
the Warrant Certificates with respect to those restrictions.
2.4 Issue in Substitution for Lost Warrants
2.4.1 In case any of the Warrant Certificates shall become mutilated or
be lost, destroyed or stolen, the Company, subject to applicable
law and to subsection 2.4.2, shall issue and thereupon the Trustee
shall certify and deliver a new Warrant Certificate of like date
and tenor as the one mutilated, lost, destroyed or stolen upon
surrender of and in place of and upon cancellation of the mutilated
Warrant Certificate, or in lieu of and in substitution for the
lost, destroyed or stolen Warrant Certificate, and the substituted
Warrant Certificate shall be in a form approved by the Trustee and
shall be entitled to the benefit hereof and rank equally in
accordance with its terms with all other Warrant Certificates
issued or to be issued hereunder.
2.4.2 The applicant for the issue of a new Warrant Certificate pursuant
to this section shall bear the cost of the issue thereof and in
case of loss, destruction or theft shall, as a condition precedent
to the issue thereof, furnish to the Company and to the Trustee
such evidence of ownership and of the loss, destruction or theft of
the Warrant Certificate so lost, destroyed or stolen as shall be
satisfactory to the Company and to the Trustee in their discretion
and the applicant may also be required to furnish an indemnity in
amount and form satisfactory to the Company and the Trustee in
their discretion, and shall pay the reasonable charges of the
Company and the Trustee in connection therewith.
2.5 Warrantholder not a Shareholder
Nothing in this Indenture or in the holding of a Warrant evidenced by a
Warrant Certificate, or otherwise, shall be construed as conferring upon a
Warrantholder any right or interest whatsoever as a shareholder, including,
but not limited to, the right to vote at, to receive notice of, or to attend
meetings of shareholders or any other proceedings of the Company or the right
to receive any dividend and other distribution.
2.6 Warrants to Rank Pari Passu
A Warrant shall rank pari passu with all other Warrants, whatever may be the
actual date of issue of the Warrant Certificates that evidence them.
2.7 Signing of Warrants
The Warrant Certificates shall be signed by any one of the President and
Chief Executive Officer and the ^ Vice-President - Administration of the
Company. The signatures of either of these officers may be mechanically
reproduced in facsimile and Warrant Certificates bearing those facsimile
signatures shall be binding upon the Company, as if they had been manually
signed by the officers. Notwithstanding that any of the persons whose manual
or facsimile signature appears on any Warrant Certificate as an officer may
no longer hold office at the date of the Warrant Certificate or at the date
of certification or delivery thereof, any Warrant Certificate signed as
aforesaid shall, subject to section 2.8, be valid and binding upon the
Company, as herein provided.
2.8 Certification by the Trustee
2.8.1 No Warrant Certificate shall be issued or, if issued, shall be
valid or entitle the holder to the benefit hereof until it has been
certified by manual signature by or on behalf of the Trustee
substantially in the form approved by the Company and the Trustee
and the certification by the Trustee upon any Warrant Certificate
shall be conclusive evidence as against the Company that the
Warrant Certificate so certified has been duly issued hereunder and
that the holder is entitled to the benefit hereof.
2.8.2 The certification of the Trustee on Warrant Certificates issued
hereunder shall not be construed as a representation or warranty by
the Trustee as to the validity of this Indenture or of the Warrant
Certificates (except the due certification thereof) and the Trustee
shall in no respect be liable or answerable for the use made of the
Warrants or any of them or of the consideration thereof, except as
otherwise specified herein.
3. EXCHANGE AND OWNERSHIP OF WARRANTS
3.1 Exchange of Warrants
3.1.1 One or more Warrant Certificates representing Warrants to acquire a
certain number of Common Shares as determined in accordance with
the provisions of this Indenture may, upon compliance with the
reasonable requirements of the Trustee, be exchanged for one or
more Warrant Certificates representing Warrants issued by the
Company, entitling the holder thereof to acquire an equal aggregate
number of Common Shares.
3.1.2 Warrants may be exchanged only at the principal transfer offices of
the Trustee in the cities of Vancouver, British Columbia [and
Toronto, Ontario] or at any other place that is designated by the
Company. Any Warrants tendered for exchange shall be surrendered to
the Trustee or to its agent and canceled. The Company shall sign
all Warrant Certificates necessary to carry out exchanges as
hereinbefore provided and those Warrant Certificates shall be
certified by or on behalf of the Trustee.
3.2 Charges for Exchange
For each Warrant exchanged, the Trustee shall, except as otherwise herein
provided, if required by the Company, charge a reasonable sum for each new
Warrant Certificate issued. The party requesting the exchange, as a condition
precedent thereto, shall pay such charges and shall pay or reimburse the
Trustee or the Company for all exigible transfer taxes or governmental or
other similar transfer charges required to be paid in connection therewith.
3.3 Ownership of Warrants
The Company and the Trustee and their respective agents may deem and treat
the holder of any Warrant as the absolute owner of that Warrant for all
purposes, and the Company and the Trustee and their respective agents shall
not be affected by any notice or knowledge to the contrary except in respect
of equities of which the Company is required to take notice by statute or by
order of a court of competent jurisdiction. The holder of any Warrant shall
be entitled to the rights evidenced by that Warrant free from all equities or
rights of set-off or counterclaim between the Company, and the original or
any intermediate holder thereof and all persons may act accordingly and the
receipt by any holder of the Common Shares or monies obtainable pursuant
thereto shall be a good discharge to the Company and the Trustee for the same
and neither the Company nor the Trustee shall be bound to inquire into the
title of any holder.
3.4 Registration and Transfer of Warrants
3.4.1 The Company hereby appoints the Trustee as registrar of the
Warrants. The Company may hereafter, with the consent of the
Trustee, appoint one or more other additional registrars of the
Warrants.
3.4.2 The Company shall cause a register and branch registers to be kept
by the Trustee at its principal transfer offices in each of the
cities of Vancouver, British Columbia [and Toronto, Ontario] and in
such other place or places and by such other agent as the Company
with the approval of the Trustee may designate, in which shall be
entered the names and addresses of the holders of Warrants and
other particulars of the Warrants held by them respectively and of
all transfers of Warrants. Warrants bearing the legend set out in
subsection 2.3.3 may not be transferred in the United States or to
or for the account or benefit of a person in the United States
unless the conditions set out in such legends are met to the
satisfaction of the Company. No transfer of Warrants shall be valid
unless:
(a) it is made by the holder or his executors or administrators or
other legal representatives or his or their attorney duly appointed
by an instrument in writing in form and executed in a manner
satisfactory to the registrar, upon compliance with such
requirements as the registrar may prescribe; and
(b) the Company and the Trustee shall have received satisfactory
written representations of the transferor and transferee together
with such other evidence (if any) as the Company shall reasonably
require to assure that the transfer complies with applicable
securities laws and the restrictions or transfer set out herein;
and
(c) the transfer shall have been duly entered on one of the appropriate
registers by a registrar.
3.4.3 The registers referred to in this section shall at all reasonable
times be open for inspection by the Company, by the Trustee and by
any Warrantholder.
3.4.4 The holder of a Warrant may at any time and from time to time have
the Warrant transferred at any of the places at which a register of
transfers is kept pursuant to the provisions of this section 3.4 in
accordance with such reasonable regulations as the registrar may
prescribe.
3.4.5 Except as required by law, neither the Trustee nor any other
registrar nor the Company shall be charged with notice of or be
bound to see to the execution of any trust, whether express,
implied or constructive, in respect of any Warrant and may transfer
any Warrant on the written direction of the holder thereof, whether
named as trustee or otherwise, as though that person were the
beneficial owner thereof.
3.4.6 Except in the case of the registers required to be kept at the
cities of Vancouver, British Columbia [and Toronto, Ontario], the
Company by agreement shall have the power to close any branch
register at any time. In the event that the register in any place
is closed, notice of the closing shall be given, in the manner
provided in section 11.2, to the Warrantholders.
3.4.7 The registrar shall, when requested so to do by the Company,
furnish the Company with a list of names and addresses of the
Warrantholders showing the number of Warrants held by each
Warrantholder.
4. EXERCISE OF WARRANTS
4.1 Method of Exercise of Warrants
4.1.1 Subject to subsection 4.1.2 the holder of any Warrant may, at any
time prior to the Time of Expiry, exercise the right thereby
conferred on him to acquire Common Shares by:
(a) surrendering to the Trustee at its principal transfer office in
either of the cities of Vancouver, British Columbia [or Toronto,
Ontario] or at any other place or places that may be designated by
the Company with the approval of the Trustee, a certificate or
certificates representing one Warrant for each Common Share to be
acquired, or, if the Exchange Number has been adjusted as provided
for in Article 5, that number of Warrants, which, when multiplied
by the Exchange Number, equals the number of Common Shares to be
acquired;
(b) delivering to the Trustee a certified cheque or recognized bank
draft payable to or to the order of the Company for the
Subscription Price for the number of Common Shares to be acquired;
and
(c) delivering to the Trustee a duly completed and executed exercise
form as attached to the Warrant Certificates, together with, if
required by subsection 4.1.2 the opinion of counsel described
therein, and the Warrants shall only be deemed to have been
surrendered upon personal delivery thereof to, or if sent by mail
or other means of transmission upon actual receipt thereof by, the
Trustee at one of the offices specified in this subsection.
4.1.2 The Common Shares issuable upon exercise of the Warrants have not
been registered under the U.S. Securities Act or the securities
laws of any state. The Warrants may not be exercised in the United
States or by or for the account or benefit of, or for resale to, a
U.S. person or a person in the United States, nor shall
certificates for Common Shares be registered at or delivered to an
address in the United States unless the Common Shares are
registered under the U.S. Securities Act and all applicable state
securities laws or exemptions from registration are available, and
an opinion of counsel to such effect, addressed to the Company and
the Trustee and satisfactory to the Company, is delivered in
connection with the exercise, provided that a person who was an
Original U.S. Purchaser of Special Warrants may exercise Warrants
issued upon exercise of those Special Warrants without providing an
opinion of counsel.
4.1.3 Any exercise form referred to in subsection 4.1.1 shall be signed
by the Warrantholder or his executors or administrators or other
legal representatives or an attorney of the Warrantholder duly
appointed by an instrument in writing satisfactory to the Trustee.
The exercise form included in the Warrant Certificate shall be
completed to specify the number of Common Shares to be acquired,
the person or persons in whose name or names the Common Shares are
to be issued, his or their address or addresses and the number of
Common Shares to be issued to each person if more than one is so
specified. If any of the Common Shares to be acquired are to be
issued to a person or persons other than the Warrantholder, the
Warrantholder shall pay to the Trustee or to its agent all exigible
transfer taxes or governmental or other charges required to be paid
in respect of the transfer of the Warrants or Common Shares.
4.1.4 Certificates representing Common Shares issuable upon exercise of
Warrants bearing the legend set out in subsection 2.3.3 shall also
bear the legend set out in subsection 2.3.3.
4.1.5 If, at the time of exercise of the Warrants, there remain
additional restrictions on resale under applicable securities
legislation on the Common Shares acquired, the Company, may, on the
advice of counsel, endorse the certificates representing the Common
Shares with respect to those restrictions.
4.2 Effect of Exercise of Warrants
4.2.1 Upon exercise of the Warrants and compliance by the holder with
section 4.1 and subject to sections 4.3 and 5.4, the holder of the
Warrants shall be entitled to receive from the Company the number
of Common Shares that is equal to the number of Warrants
surrendered multiplied by the Exchange Number in effect at the date
of the surrender and the Company shall cause the holder thereof to
be entered forthwith on its register of shareholders as the holder
of the Common Shares.
4.2.2 Upon the due exercise of the Warrants as hereinbefore provided, the
Company shall, without charge therefor except as provided in
subsection 4.1.3, forthwith cause to be mailed to the person or
persons in whose name or names the Common Shares so acquired are to
be issued as specified by the holder of Warrants in the exercise
form on the Warrant Certificate at his or their respective address
or addresses specified in the exercise form or, if specified in the
exercise form, cause to be delivered to the person or persons at
the office where the Warrants were surrendered, a certificate or
certificates for the appropriate number of Common Shares that the
Warrantholder is entitled to and has elected to acquire pursuant to
the Warrants surrendered.
4.3 No Fractional Common Shares
Under no circumstances shall the Company be obliged to issue any fractional
Common Shares upon the exercise of one or more Warrants. To the extent that
the holder of one or more Warrants would otherwise have been entitled to
receive on the exercise or partial exercise thereof a fraction of a Common
Share, then such holder may exercise that right in respect of the fraction
only in combination with another Warrant or Warrants that in the aggregate
entitle the holder to purchase a whole number of Common Share. If such right
if not so exercised, the Company shall pay to the holder by cheque, in
satisfaction of the right to otherwise have received a fraction of a Common
Share, the amount obtained when the fraction of a Common Share to which the
holder would be entitled is multiplied by the Current Market Price.
4.4 Expiration of Warrants
After the Time of Expiry, all rights under any Warrant in respect of which
the right of subscription herein and therein provided for shall not
theretofore have been exercised shall wholly cease and terminate and the
Warrant shall be void and of no effect.
4.5 Accounting and Recording
The Trustee shall promptly notify the Company with respect to Warrants
exercised. The Trustee shall record the particulars of the Warrants
exercised which shall include the name or names and addresses of the persons
who become holders of Common Shares on exercise and the Exercise Date. Within
three business days of each Exercise Date, the Trustee shall provide those
particulars in writing to the Company.
5. ADJUSTMENT OF EXCHANGE NUMBER
5.1 Definitions
In this Article, the term "Adjustment Period" means the period from and
including the date hereof to and including the expiry of the Exercise Period
and the terms "record date" and "effective date" where used herein shall mean
the close of business on the relevant date.
5.2 Adjustment of Exchange Number
The Exchange Number (or the number and kind of shares or securities to be
received upon exercise in the case of subsections 5.2.4 and 5.2.5 below)
shall be subject to adjustment from time to time in the events and in the
manner provided in section 5.3 and in the manner provided in this Article 5.
5.2.1 If during the Adjustment Period the Company shall:
(a) issue to all or substantially all the holders of the Common
Shares in Canada by way of a stock dividend or otherwise
Common Shares or Convertible Securities (save and except for
any issue of Common Shares in lieu of cash dividends paid in
the ordinary course upon exercise by shareholders of a right
to receive or reinvest cash dividends in Common Shares and
save and except for dividends paid in the ordinary course); or
(b) subdivide or split its then outstanding Common Shares into a
greater number of shares; or
(c) combine or consolidate its then outstanding Common Shares into
a smaller number of shares
(any of those events being herein called a "Common Share
Reorganization");
then the Exchange Number shall be adjusted effective immediately
after the record date at which the holders of Common Shares are
determined for the purposes of the Common Share Reorganization to a
number that is the product of (1) the Exchange Number in effect on
the record date and (2) a fraction:
(d) the numerator of which shall be the number of Common Shares
outstanding after giving effect to the Common Share
Reorganization; and
(e) the denominator of which shall be the number of Common Shares
outstanding on the record date before giving effect to the
Common Share Reorganization.
For the purposes of determining the number of Common Shares
outstanding at any particular time for the purpose of this
subsection 5.2.1 there shall be included that number of Common
Shares which would have resulted from the conversion at that time
of all outstanding Convertible Securities.
5.2.2 If during the Adjustment Period the Company shall issue rights,
options or warrants to all or substantially all the holders of the
Common Shares pursuant to which those holders are entitled to
subscribe for, purchase or otherwise acquire Common Shares or
Convertible Securities, save and except rights, options or warrants
to acquire within a period of 45 days from the date of issue
thereof Common Shares at a price, or Convertible Securities at a
conversion price, of not less than 95% of the Current Market Price
at such date of issue aforesaid (any issuance not hereinbefore
excepted being herein called a "Rights Offering" and Common Shares
that may be acquired in exercise of the Rights Offering, or upon
conversion of the Convertible Securities offered by the Rights
Offering, being herein called the "Offered Common Shares"), the
Exchange Number shall be adjusted effective immediately after the
record date at which holders of Common Shares are determined for
the purposes of the Rights Offering to an Exchange Number that is
the product of (1) the Exchange Number in effect on the record date
and (2) a fraction:
(a) the numerator of which shall be the sum of:
(i) the number of Common Shares outstanding on the record date;
plus:
(ii) the number of Offered Common Shares offered pursuant to the
Rights Offering or the maximum number of Offered Common Shares
into which the Convertible Securities so offered pursuant to
the Rights Offering may be converted, as the case may be; and
(b) the denominator of which shall be the sum of:
(i) the number of Common Shares outstanding on the record date;
plus:
(ii) the number arrived at when (A) either the product of (1) the
number of Offered Common Shares so offered and (2) the price
at which those shares are offered, or the product of (3) the
conversion price thereof and (4) the maximum number of Offered
Common Shares for or into which the Convertible Securities so
offered pursuant to the Rights Offering may be converted, as
the case may be, is divided by (B) the Current Market Price of
the Common Shares on the record date.
Any Offered Common Shares owned by or held for the account of the
Company shall be deemed not to be outstanding for the purpose of
any computation. If all the rights, options or warrants are not so
issued or if all rights, options or warrants are not exercised
prior to the expiration thereof, the Exchange Number shall be
readjusted to the Exchange Number in effect immediately prior to
the record date, and the Exchange Number shall be further adjusted
based upon the number of Offered Common Shares (or Convertible
Securities into Offered Common Shares) actually delivered upon the
exercise of the rights, options or warrants, as the case may be,
but subject to any other adjustment required hereunder by reason of
any event arising after that record date.
5.2.3 If during the Adjustment Period the Company shall issue or
distribute to all or substantially all the holders of Common
Shares, (i) shares of any class other than Common Shares, (ii)
rights, options or warrants, (iii) evidences of indebtedness or
(iv) any other assets (excluding cash dividends paid in the
ordinary course) and that issuance or distribution does not
constitute a Common Share Reorganization or a Rights Offering or an
issuance excepted from the definition of Rights Offering in
subsection 5.2.2 (any of those events being herein called a
"Special Distribution"), the Exchange Number shall be adjusted
effective immediately after the record date at which the holders of
Common Shares are determined for purposes of the Special
Distribution to an Exchange Number that is the product of (1) the
Exchange Number in effect on the record date and (2) a fraction:
(a) the numerator of which shall be the product of:
(i) the sum of the number of Common Shares outstanding on the
record date plus the number of Common Shares which the
Warrantholders would be entitled to receive upon exercise of
all their outstanding Warrants if they were exercised on the
record date;
multiplied by:
(ii) the Current Market Price thereof on that date; and
(b) the denominator of which shall be:
(i) the product of:
(A) the sum of the number of Common Shares outstanding on
the record date plus the number of Common Shares which
the Warrantholders would be entitled to receive upon
exercise of all their outstanding Warrants if they were
exercised on the record date;
multiplied by:
(B) the Current Market Price thereof on that date;
less:
(ii) the aggregate fair market value, as determined by the board,
whose determination shall be conclusive, of the shares,
rights, options, warrants, evidences of indebtedness or other
assets issued or distributed in the Special Distribution.
Any Common Shares owned by or held for the account of the Company
shall be deemed not to be outstanding for the purpose of any such
computation; to the extent that the distribution of shares, rights,
options, warrants, evidences of indebtedness or assets is not so
made or to the extent that any rights, options or warrants so
distributed are not exercised, the Exchange Number shall be
readjusted to the Exchange Number that would then be in effect
based upon shares, rights, options, warrants, evidences of
indebtedness or assets actually distributed or based upon the
number of Common Shares or Convertible Securities actually
delivered upon the exercise of the rights, options or warrants, as
the case may be, but subject to any other adjustment required
hereunder by reason of any event arising after the record date.
5.2.4 If during the Adjustment Period there is a reorganization of the
Company not otherwise provided for in subsection 5.2.1 or a
consolidation, merger or amalgamation of the Company with or into
another body corporate or other entity including a transaction
whereby all or substantially all of the Company's undertaking and
assets become the property of any other corporation or other entity
(any such event being herein called a "Capital Reorganization"),
any holder of a Warrant who has not exercised his Warrant for
Common Shares prior to the effective date of the Capital
Reorganization shall be entitled to receive and shall accept, upon
the exercise of his Warrants at any time after the effective date
of the Capital Reorganization, in lieu of the number of Common
Shares (and any other securities or properties to which holders are
entitled upon exercise of the Warrants) to which he was theretofore
entitled upon exercise of the Warrants, the aggregate number of
shares or other securities or property of the Company, or the
continuing, successor or purchasing corporation, as the case may
be, under the Capital Reorganization that the holder would have
been entitled to receive as a result of the Capital Reorganization
if, on the effective date thereof, he had been the holder of the
number of Common Shares (and any other securities to which holders
are entitled upon exercise of the Warrants) to which immediately
before the transaction he was entitled upon exercise of the
Warrants. No Capital Reorganization shall be carried into effect
unless all necessary steps shall have been taken so that the
holders of Warrants shall thereafter be entitled to receive the
number of shares or other securities or property of the Company, or
of the continuing, successor or purchasing corporation or other
entity, as the case may be, under the Capital Reorganization,
subject to adjustment thereafter in accordance with provisions the
same, as nearly as may be possible, as those contained in this
section 5.2 and in section 5.3.
5.2.5 If the Company shall reclassify or otherwise change the outstanding
Common Shares, the exercise right shall be adjusted effective
immediately upon the reclassification becoming effective so that
holders of Warrants who exercise their rights thereafter shall be
entitled to receive such shares as they would have received had the
Warrants been exercised immediately prior to the effective date,
subject to adjustment thereafter in accordance with provisions the
same, as nearly as may be possible, as those contained in this
section 5.2 and in section 5.3.
5.3 Subscription Rights Adjustment Rules
5.3.1 The adjustments and readjustments provided for in this Article 5
are cumulative and, subject to subsection 5.3.2, shall apply
(without duplication) to successive issues, subdivisions,
combinations, consolidations, distributions and any other events
that require adjustment of the Exchange Number or the number or
kind of shares or securities purchasable hereunder.
5.3.2 No adjustment in the Exchange Number shall be required unless the
adjustment would result in a change of at least 1% in the Exchange
Number then in effect; provided, however, that any adjustments
that, except for the provisions of this subsection 5.3.2 would
otherwise have been required to be made, shall be carried forward
and taken into account in any subsequent adjustment.
5.3.3 No adjustment in the Exchange Number shall be made in respect of
any event described in subsection 5.2.1(a) or subsections 5.2.2 or
5.2.3 if the holders of the Warrants are entitled to participate in
the event on the same terms, mutatis mutandis, as if they had
exercised their Warrants immediately prior to the effective date or
record date of the event. Any participation in such event by
Warrantholders is subject to the prior written consent of The
Toronto Stock Exchange and the Vancouver Stock Exchange, to the
extent required by such exchanges, if the Common Shares are then
listed on such exchanges.
5.3.4 No adjustment in the Exchange Number shall be made pursuant to
section 5.2 in respect of the issue of Common Shares pursuant to:
(a) this Indenture and the Warrants or the Warrants; or
(b) any stock option or purchase plan for officers or employees of
the Company or a subsidiary of the Company;
and any such issue shall be deemed not to be a Common Share
Reorganization, a Rights Offering or a Special Distribution.
5.3.5 If a dispute shall at any time arise with respect to adjustments of
the Exchange Number, the dispute shall be conclusively determined
by the auditors of the Company or if they are unable or unwilling
to act, by such firm of independent chartered accountants as may be
selected by the directors and any such determination shall be
binding upon the Company, the Trustee, all transfer agents and all
Warrantholders.
5.3.6 If the Company shall set a record date to determine the holders of
Common Shares for the purpose of entitling them to receive any
dividend or distribution or any subscription or purchase rights and
shall, thereafter, legally abandon its plans to pay or deliver the
dividend, distribution or subscription or purchase rights, then no
adjustment in the Exchange Number shall be required by reason of
the setting of the record date.
5.4 Postponement of Subscription
In any case where the application of section 5.2 results in an increase of
the Exchange Number taking effect immediately after the record date for or
occurrence of a specific event, if any Warrants are exercised after that
record date or occurrence and prior to completion of the event or of the
period for which a calculation is required to be made, the Company may
postpone the issuance to the holder of the Warrants of the Common Shares to
which he is entitled by reason of the increase of the Exchange Number but the
Common Shares shall be so issued and delivered to that holder upon completion
of that event or period, with the number of those Common Shares calculated on
the basis of the Exchange Number on the Exercise Date adjusted for completion
of that event or period, and the Company shall forthwith after the Exercise
Date deliver to the person or persons in whose name or names the Common
Shares are to be issued an appropriate instrument evidencing his or their
right to receive the Common Shares.
5.5 Notice of Certain Events
5.5.1 At least 14 days prior to the effective date or record date, as the
case may be, of any event referred to in sections 5.2 or 5.3
whether or not the event requires or might require an adjustment in
the subscription rights pursuant hereto the Company shall:
(a) file with the Trustee a certificate of the Company specifying
the particulars of the event and, if determinable, any
adjustment and the computation of the adjustment; and
(b) give notice to the Warrantholders of the particulars of the
event and, if determinable, any adjustment.
Such notice need only set out such particulars as shall have been
determined at the date that notice is given.
5.5.2 In case any adjustment for which a notice in subsection 5.5.1 has
been given is not then determinable, the Company shall promptly
after the adjustment is determinable:
(a) file with the Trustee a computation of the adjustment; and
(b) give notice to the Warrantholders of the adjustment.
6. RIGHTS AND COVENANTS
6.1 Company May Purchase
The Company may from time to time purchase, in the open market or by private
contract, any of the Warrants from such persons and on such terms as it may
determine.
6.2 General Covenants of the Company
The Company covenants with the Trustee that so long as any Warrants remain
outstanding:
(a) the Company will at all times maintain its existence, carry on and
conduct its business in a proper, efficient and business-like
manner and in accordance with good business practice, keep or cause
to be kept proper books of account in accordance with applicable
law, and, if and whenever required in writing by the Trustee, file
with the Trustee copies of all annual statements of the Company
sent by it to its shareholders during the term of this Indenture.
(b) the Company will reserve and keep available a sufficient number of
Common Shares for issuance upon the exercise of Warrants.
(c) the Company will cause the Common Shares from time to time
subscribed for pursuant to the Warrants, in the manner herein
provided, to be duly issued and delivered in accordance with the
Warrants and the terms hereof.
(d) the Company will cause the certificates representing the Common
Shares from time to time to be acquired pursuant to the Warrants in
the manner herein provided, to be duly issued and delivered in
accordance with the Warrants and the terms hereof.
(e) all Common Shares that shall be issued by the Company upon exercise
of the Warrants shall be issued as fully paid and non-assessable
shares.
(f) the Company will use its reasonable best efforts to maintain its
status as a "reporting issuer" (or the equivalent thereof) not in
default of the requirements of the applicable securities acts and
regulations in each of the provinces of British Columbia and
Ontario, and in each other province in which it attains that status
prior to the Time of Expiry, until the date which is six months
following the Time of Expiry.
(g) the Company will use its reasonable best efforts to ensure that the
Common Shares issuable upon exercise of the Warrants will be listed
and posted for trading on The Toronto Stock Exchange upon their
issue;
(h) the Company will not engage in "directed selling efforts" as
defined in Regulation S with respect to its Common Shares or engage
in general solicitation within the meaning of Regulation D; and
(i) generally, the Company will well and truly perform and carry out
all the acts or things to be done by it as provided in this
Indenture.
6.3 Trustee's Remuneration and Expenses
The Company covenants that it will pay to the Trustee from time to time
reasonable remuneration for its services hereunder and will pay or reimburse
the Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in the administration or execution
hereof (including the reasonable compensation and the disbursements of
counsel and all other advisers and assistants not regularly in its employ),
both before any default hereunder and thereafter until all duties of the
Trustee hereunder shall be finally and fully performed, except any expense,
disbursement or advance as may arise from the negligence or bad faith of the
Trustee or of persons for whom the Trustee is responsible.
6.4 Performance of Covenants by Trustee
If the Company shall fail to perform any of its covenants contained in this
Indenture, the Trustee may notify the Warrantholders of the failure on the
part of the Company or may itself perform any of the said covenants capable
of being performed by it, but shall be under no obligation to do so or to
notify the Warrantholders. All sums expended or advanced by the Trustee in so
doing shall be repayable as provided in section i. No performance,
expenditure or advance by the Trustee shall be deemed to relieve the Company
of any default hereunder.
7. ENFORCEMENT
7.1 Suits by Warrantholders
All or any of the rights conferred upon a Warrantholder by the terms of a
Warrant or of this Indenture may be enforced by the holder by appropriate
legal proceedings but without prejudice to the right that is hereby conferred
upon the Trustee to proceed in its own name to enforce each and all the
provisions herein contained for the benefit of the holders of the Warrants
from time to time outstanding.
7.2 Immunity of Shareholders
The Trustee, and by their acceptance of the Warrant Certificates and as part
of the consideration for the issue of the Warrants, the Warrantholders,
hereby waive and release any right, cause of action or remedy now or
hereafter existing in any jurisdiction against any past, present or future
shareholder, director or officer of the Company, in their capacity as such,
for the issue of Common Shares pursuant to any Warrants or on any covenant,
agreement, representation or warranty by the Company herein or in the Warrant
Certificates.
7.3 Limitation of Liability
The obligations hereunder are not personally binding upon, nor shall resort
hereunder be had to, the private property of any of the past, present or
future directors or shareholders of the Company or any of the past, present
or future officers, employees or agents of the Company, but only the property
of the Company (or any successor corporation) shall be bound in respect
hereof.
8. MEETINGS OF WARRANTHOLDERS
8.1 Right to Convene Meetings
The Trustee may at any time and from time to time and shall on receipt of a
written request of the Company or of a Warrantholders' Request and upon being
indemnified to its reasonable satisfaction by the Company or by the
Warrantholders signing the Warrantholders' Request against the cost that may
be incurred in connection with the calling and holding of the meeting,
convene a meeting of the Warrantholders. In the event of the Trustee failing,
within 15 days after receipt of the written request of the Company or
Warrantholders' Request and indemnity given as hereinbefore provided, to give
notice convening a meeting, the Company or the Warrantholders, as the case
may be, may convene the meeting. Every meeting shall be held in the City of
Vancouver, the City of Toronto or at such other place as may be approved or
determined by the Trustee.
8.2 Notice
At least 14 days' notice of any meeting shall be given to the Warrantholders
in the manner provided in section 11.2 and a copy of the notice shall be sent
by mail to the Trustee unless the meeting has been called by it and to the
Company unless the meeting has been called by it. Each notice shall state the
time when and the place where the meeting is to be held and shall state
briefly the general nature of the business to be transacted thereat and it
shall not be necessary for the notice to set out the terms of any resolution
to be proposed or any of the provisions of this Article 8.
8.3 Chairman
A person nominated in writing by the Trustee shall be chairman of the meeting
and if no person is so nominated, or if the person so nominated is not
present within 15 minutes from the time fixed for the holding of the meeting,
the Warrantholders present in person or by proxy shall choose a person
present to be chairman.
8.4 Quorum
Subject to the provisions of section 8.12, at any meeting of the
Warrantholders a quorum shall consist of Warrantholders present in person or
by proxy and entitled to acquire at least 20% of the aggregate number of
Common Shares that could be acquired pursuant to all the then outstanding
Warrants. If a quorum of the Warrantholders shall not be present within half
an hour from the time fixed for holding any meeting, the meeting, if summoned
by the Warrantholders or on a Warrantholders' Request, shall be dissolved,
but (subject to section 8.12), in any other case the meeting shall be
adjourned to the same day in the next week (unless that day is a non-business
day, in which event the meeting shall be reconvened on the next day that is a
business day) at the same time and place and no notice need be given. At the
adjourned meeting the Warrantholders present in person or by proxy shall form
a quorum and may transact the business for which the meeting was originally
convened, notwithstanding that they may not be entitled to acquire at least
20% of the aggregate number of Common Shares that can be acquired pursuant to
all the then outstanding Warrants.
8.5 Power to Adjourn
The chairman of any meeting at which a quorum of the Warrantholders is
present may, with the consent of the meeting, adjourn the meeting and no
notice of the adjournment need be given except such notice, if any, as the
meeting may prescribe.
8.6 Show of Hands
Every question submitted to a meeting shall be decided in the first place by
a majority of the votes given on a show of hands except that votes on an
extraordinary resolution shall be given in the manner hereinafter provided.
At any meeting, unless a poll is duly demanded as herein provided, a
declaration by the chairman that a resolution has been carried or carried
unanimously or by a particular majority or lost or not carried by a
particular majority shall be conclusive evidence of the fact.
8.7 Poll
On every extraordinary resolution, and on any other question submitted to a
meeting upon which a poll is directed by the chairman or requested by one or
more of the Warrantholders acting in person or by proxy, a poll shall be
taken in such manner as the chairman shall direct. Questions other than an
extraordinary resolution shall be decided by a majority of the votes cast on
a poll.
8.8 Voting
On a show of hands every person who is present and entitled to vote, whether
as a Warrantholder or as proxy for one or more absent Warrantholders or both,
shall have one vote. On a poll each Warrantholder present in person or
represented by a proxy duly appointed by instrument in writing shall be
entitled to one vote in respect of each Warrant then held by him. A proxy
need not be a Warrantholder.
8.9 Regulations
8.9.1 The Trustee, or the Company with the approval of the Trustee, may
from time to time make or vary such regulations as they shall think
fit:
(a) for the issue of voting certificates by any bank, trust
company or other depository satisfactory to the Trustee
stating that the Warrants specified therein have been
deposited with the depository by a named person and will
remain on deposit until after the meeting, which voting
certificates shall entitle the persons named therein to be
present and vote at the meeting and at any adjournment thereof
or to appoint a proxy or proxies to represent them and vote
for them at that meeting and at any adjournment thereof in the
same manner and with the same effect as though the persons so
named in the voting certificates were the actual holders of
the Warrants specified therein;
(b) for the deposit of voting certificates and/or instruments
appointing proxies at such place and time as the Trustee, the
Company or the Warrantholders convening the meeting, as the
case may be, may in the notice convening the meeting direct;
(c) for the deposit of voting certificates and/or instruments
appointing proxies at some approved place or places other than
the place at which the meeting is to be held and enabling
particulars of the voting certificates and/or instruments
appointing proxies to be sent by mail, cable, telex or other
means of prepaid, transmitted, recorded communication before
the meeting to the Company or to the Trustee at the place
where the same is to be held and for the voting of proxies so
deposited as though the instruments themselves were produced
at the meeting; and
(d) for the form of instrument appointing a proxy.
8.9.2 Any regulations so made shall be binding and effective and the
votes given in accordance therewith shall be valid and shall be
counted. Except as such regulations may provide, the only persons
who shall be recognized at any meeting as the holders of any
Warrants, or as entitled to vote or, subject to section 8.10, be
present at the meeting in respect thereof, shall be persons who are
the registered holders of Warrants.
8.10 Company and Trustee may be Represented
The Company and the Trustee by their respective officers or directors, and
the counsel to the Company and the Trustee, may attend any meeting of the
Warrantholders, but shall have no vote as such.
8.11 Powers Exercisable by Extraordinary Resolution
In addition to all other powers conferred upon them by any other provisions
of this Indenture or by law, the Warrantholders at a meeting shall have the
following powers exercisable from time to time by extraordinary resolution:
(a) power to agree to any modification, abrogation, alteration,
compromise or arrangement of the rights of Warrantholders and/or
the Trustee in its capacity as trustee hereunder or on behalf of
the Warrantholders against the Company whether those rights arise
under this Indenture or the Warrants or otherwise, except that, in
respect of a change in the Time of Expiry or the Subscription
Price, the amendment shall not be binding upon a Warrantholder who
does not consent thereto;
(b) power to direct or authorize the Trustee to enforce any of the
covenants on the part of the Company contained in this Indenture or
the Warrants or to enforce any of the rights of the Warrantholders
in any manner specified in the extraordinary resolution or to
refrain from enforcing any such covenant or right;
(c) power to waive and direct the Trustee to waive any default on the
part of the Company in complying with any provisions of this
Indenture or the Warrants either unconditionally or upon any
conditions specified in the extraordinary resolution;
(d) power to restrain any Warrantholder from taking or instituting any
suit, action or proceeding against the Company for the enforcement
of any of the covenants on the part of the Company contained in
this Indenture or the Warrants or to enforce any of the rights of
the Warrantholders;
(e) power to direct any Warrantholder who, as such, has brought any
suit, action or proceeding to stay or discontinue or otherwise deal
with the same upon payment of the costs, charges and expenses
reasonably and properly incurred by the Warrantholder in connection
therewith; and
(f) power from time to time and at any time to remove the Trustee and
appoint a successor trustee.
8.12 Meaning of "Extraordinary Resolution"
8.12.1 The expression "extraordinary resolution" when used in this
Indenture means, subject as hereinafter provided in this section
8.12 and in sections 8.15 and 8.16, a resolution proposed at a
meeting of the Warrantholders duly convened for that purpose and
held in accordance with the provisions of this Article 8 at which
there are present in person or by proxy Warrantholders entitled to
acquire at least 51% of the aggregate number of Common Shares that
can be acquired pursuant to all the then outstanding Warrants and
passed by the affirmative votes of Warrantholders entitled to
acquire not less than two thirds of the aggregate number of Common
Shares that can be acquired pursuant to all the Warrants
represented at the meeting and voted on the poll upon the
resolution.
8.12.2 If, at any meeting called for the purpose of passing an
extraordinary resolution, Warrantholders entitled to acquire 51% of
the aggregate number of Common Shares that can be acquired pursuant
to all the then outstanding Warrants are not present in person or
by proxy within half an hour after the time appointed for the
meeting, then the meeting, if convened by Warrantholders or on a
Warrantholders' Request, shall be dissolved, but, in any other
case, it shall stand adjourned to such day, being not less than 15
or more than 60 days later, and to such place and time as may be
appointed by the chairman. Not less than 10 days' notice shall be
given of the time and place of the adjourned meeting in the manner
provided in section 11.2. The notice shall state that at the
adjourned meeting the Warrantholders present in person or by proxy
shall form a quorum but it shall not be necessary to set out the
purposes for which the meeting was originally called or any other
particulars. At the adjourned meeting the Warrantholders present in
person or by proxy shall form a quorum and may transact the
business for which the meeting was originally convened and a
resolution proposed at the adjourned meeting and passed by the
requisite vote as provided in subsection 8.12.1 shall be an
extraordinary resolution within the meaning of this Indenture,
notwithstanding that Warrantholders entitled to acquire 51% of the
aggregate number of Common Shares that can be acquired pursuant to
all the then outstanding Warrants are not present in person or by
proxy at the adjourned meeting.
8.12.3 Votes on an extraordinary resolution shall always be given on a
poll and no demand for a poll on an extraordinary resolution shall
be necessary.
8.13 Powers Cumulative
It is hereby declared and agreed that any one or more of the powers or any
combination of the powers in this Indenture stated to be exercisable by the
Warrantholders by extraordinary resolution or otherwise may be exercised from
time to time and the exercise of any one or more of the powers or any
combination of the powers from time to time shall not be deemed to exhaust
the right of the Warrantholders to exercise that power or those powers or
combination of powers then or any other power or powers or combination of
powers thereafter from time to time.
8.14 Minutes
Minutes of all resolutions and proceedings at every meeting of Warrantholders
as aforesaid shall be made and duly entered in books to be provided for that
purpose by the Trustee at the expense of the Company and any such minutes, if
signed by the chairman of the meeting at which resolutions were passed or
proceedings had, or by the chairman of the next succeeding meeting of the
Warrantholders, shall be prima facie evidence of the matters therein stated
and, until the contrary is proved, every meeting, in respect of the
proceedings of which minutes shall have been made, shall be deemed to have
been duly convened and held, and all resolutions passed thereat or
proceedings taken, to have been duly passed and taken.
8.15 Instruments in Writing
All actions that may be taken and all powers that may be exercised by the
Warrantholders at a meeting held as hereinbefore in this Article 8 provided
may also be taken and exercised by Warrantholders entitled to acquire
two-thirds of the aggregate number of Common Shares that can be acquired
pursuant to all the then outstanding Warrants by an instrument in writing
signed in one or more counterparts by Warrantholders in person or by attorney
duly appointed in writing and the expression "extraordinary resolution" when
used in this Indenture shall include an instrument so signed.
8.16 Binding Effect of Resolutions
Every resolution and every extraordinary resolution passed in accordance with
the provisions of this Article 8 at a meeting of Warrantholders shall be
binding upon all the Warrantholders, whether present at or absent from the
meeting, and every instrument in writing signed by Warrantholders in
accordance with section 8.15 shall be binding upon all the Warrantholders,
whether signatories thereto or not, and each and every Warrantholder and the
Trustee (subject to the provisions for its indemnity herein contained) shall
be bound to give effect accordingly to every resolution and instrument in
writing passed or executed in accordance with these provisions.
8.17 Holdings by Company Disregarded
In determining whether the requisite number of Warrantholders are present for
the purpose of obtaining a quorum or have voted or consented to any
resolution, extraordinary resolution, consent, waiver, Warrantholders'
Request or other action under this Indenture, Warrants owned by the Company
or any subsidiary of the Company shall be deemed to be not outstanding.
9. SUPPLEMENTAL INDENTURES AND SUCCESSOR COMPANIES
9.1 Provision for Supplemental Indentures for Certain Purposes
9.1.1 From time to time the Company and the Trustee may, subject to the
provisions hereof, and they shall, when so directed hereby, execute
and deliver by their proper officers indentures or instruments
supplemental hereto, which thereafter shall form part hereof, for
any one or more or all of the following purposes:
(a) adding to the provisions hereof such additional covenants and
enforcement provisions as, in the opinion of counsel, are
necessary or advisable, provided that the same are not in the
opinion of the Trustee prejudicial to the interest of the
Warrantholders as a group;
(b) giving effect to any extraordinary resolution passed as
provided in Article 8;
(c) making provisions not inconsistent with this Indenture as may
be necessary or desirable with respect to matters or questions
arising hereunder provided that the provisions are not, in the
opinion of the Trustee, prejudicial to the interests of the
Warrantholders as a group;
(d) adding to or altering the provisions hereof in respect of the
transfer of Warrants, making provision for the exchange of
Warrants and making any modification in the form of the
Warrants that does not affect the substance thereof;
(e) modifying any of the provisions of this Indenture or relieving
the Company from any of the obligations, conditions or
restrictions herein contained, provided that no such
modification or relief shall be or become operative or
effective if in the opinion of the Trustee the modification or
relief impairs any of the rights of the Warrantholders as a
group, or of the Trustee, and provided that the Trustee may in
its uncontrolled discretion decline to enter into any
supplemental indenture which in its opinion may not afford
adequate protection to the Trustee when the same shall become
operative;
(f) for any other purpose not inconsistent with the terms of this
Indenture, including the correction or rectification or any
ambiguities, defective provisions, errors or omissions herein,
provided that in the opinion of the Trustee the rights of the
Trustee and the Warrantholders as a group, are in no way
prejudiced thereby; and
(g) evidencing any succession or successions of other bodies
corporate to the Company and the assumption by any successor
of the covenants of the Company contained herein, as provided
in section 9.2.
9.1.2 For the purposes of this section 9.1, the phrase "the
Warrantholders as a group" does not include the Company or any of
its subsidiaries to the extent that they hold any Warrants.
9.2 Successor Companies
In the case of the consolidation, amalgamation, merger or transfer of the
undertaking or assets of the Company as an entirety or substantially as an
entirety to another corporation (a "successor corporation"), the successor
corporation resulting from the consolidation, amalgamation, merger or
transfer (if not the Company) shall be bound by the provisions hereof and all
obligations for the due and punctual performance and observance of each and
every covenant and obligation contained in this Indenture to be performed by
the Company, and, if requested by the Trustee, the successor corporation
shall, by supplemental indenture satisfactory in form to the Trustee and
executed and delivered to the Trustee, expressly assume those obligations.
10. CONCERNING THE TRUSTEE
10.1 Trust Indenture Legislation
10.1.1 If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with a mandatory requirement of Applicable
Legislation, such mandatory requirement shall prevail.
10.1.2 The Company and the Trustee agree that each will at all times in
relation to this Indenture and any action to be taken hereunder
observe and comply with and be entitled to the benefits of
Applicable Legislation.
10.2 Rights and Duties of Trustee
10.2.1 In the exercise of the rights and duties prescribed or conferred by
the terms of this Indenture, the Trustee shall act honestly and in
good faith with a view to the best interests of the Warrantholders
and shall exercise that degree of care, diligence and skill that a
reasonably prudent trustee would exercise in comparable
circumstances.
10.2.2 The obligation of the Trustee to commence or continue any act,
action or proceeding for the purpose of enforcing any rights of the
Trustee or the Warrantholders hereunder shall be conditional on the
Warrantholders furnishing, when required by notice in writing by
the Trustee, sufficient funds to commence or continue the act,
action or proceeding and indemnity reasonably satisfactory to the
Trustee to protect and hold harmless the Trustee against the costs,
charges and expenses and liabilities to be incurred thereby and any
loss and damage it may suffer by reason thereof. None of the
provisions contained in this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties or in the exercise of any
of its rights or powers unless indemnified as hereinbefore
provided.
10.2.3 The Trustee may before commencing action or proceeding, or at any
time during the continuance thereof require the Warrantholders at
whose instance it is acting to deposit with the Trustee the Warrant
Certificates held by them, for which Warrant Certificates the
Trustee shall issue receipts.
10.2.4 Every provision of this Indenture that by its terms relieves the
Trustee of liability or entitles it to rely upon any evidence
submitted to it is subject to the provisions of Applicable
Legislation, and of this section 10.2 and section 10.3.
10.3 Evidence. Experts and Advisers
10.3.1 In addition to the reports, certificates, opinions and other
evidence required by this Indenture, the Company shall furnish to
the Trustee such additional evidence of compliance with any
provision hereof, and in such form, as may be prescribed by
Applicable Legislation or as the Trustee may reasonably require by
written notice to the Company.
10.3.2 In the exercise of its rights- and duties, the Trustee may, if it
is acting in good faith, rely as to the truth of the statements and
the accuracy of the opinions expressed therein, upon statutory
declarations, opinions, reports, certificates or other evidence
furnished to the Trustee pursuant to any provision hereof or of
Applicable Legislation or pursuant to a request of the Trustee,
provided that the evidence complies with Applicable Legislation and
that the Trustee examines the same and determines that the evidence
complies with the applicable requirements of this Indenture.
10.3.3 Whenever Applicable Legislation requires that evidence referred to
in subsection 10.3.1 be in the form of a statutory declaration, the
Trustee may accept the statutory declaration in lieu of a
certificate of the Company required by any provision hereof Any
such statutory declaration may be made by one or more of the
officers of the Company.
10.3.4 Proof of the execution of an instrument in writing, including a
Warrantholders' Request, by any Warrantholder may be made by the
certificate of a notary public, or other person with similar powers
that the person signing the instrument acknowledged to him the
execution thereof, or by an affidavit of a witness to the execution
or in any other manner that the Trustee may consider adequate.
10.3.5 The Trustee may, at the expense of the Company, employ or retain
such counsel, accountants, engineers, appraisers, or other experts
or advisers as it may reasonably require for the purpose of
discharging its duties hereunder and may pay reasonable
remuneration for all services so performed by any of them, without
taxation of costs of any counsel, and shall not be responsible for
any misconduct on the part of any of them.
10.3.6 The Trustee may, at the expense of the Company, as a condition
precedent to any action to be taken by it under this Indenture
require such opinions, statutory declarations, reports,
certificates or other evidence as it, acting reasonably, considers
necessary or advisable in the circumstances.
10.4 Securities, Documents and Monies Held by Trustee
Any securities, documents of title or other instruments that may at any time
be held by the Trustee subject to the trusts hereof may be placed in the
deposit vaults of the Trustee or of any of the Canadian Imperial Bank of
Commerce, Bank of Montreal, Bank of Nova Scotia, The Toronto-Dominion Bank
Royal Bank of Canada, National Bank of Canada and the Hong Kong Bank of
Canada or deposited for safekeeping with any of those Canadian chartered
banks. Unless herein otherwise expressly provided, any monies held pending
the application or withdrawal thereof under any provisions of this Indenture
shall be invested in short-term obligations issued or guaranteed by the
Government of Canada or any province of Canada and specified by the Company,
provided that such monies may be held on deposit as hereinbefore contemplated
for any period of no more than 24 hours pending such investment. Subject to
the provisions of this Indenture and unless the Company shall be in default
hereunder, all interest or other income received by the Trustee in respect of
such deposits and investments shall belong to the Company.
10.5 Action by Trustee to Protect Interests
The Trustee shall have power to institute and to maintain such actions and
proceedings as it may consider necessary or expedient to preserve, protect or
enforce its interests and the interests of the holders of Warrants.
10.6 Trustee Not Required to Give Security
The Trustee shall not be required to give any bond or security in respect of
the execution of the trusts and powers of this Indenture or otherwise in
respect of the premises.
10.7 Protection of Trustee
By way of supplement to the provisions of any law for the time being relating
to trustees, it is expressly declared and agreed as follows:
(a) the Trustee shall not be liable for or by reason of any
representations, statements of fact or recitals in this Indenture
or in the Warrants (except the representation contained in section
10.9 or in the certificate of the Trustee on the Warrants) or
required to verify the same, but all those statements or recitals
are and shall be deemed to be made by the Company;
(b) nothing herein contained shall impose any obligation on the Trustee
to see to or to require evidence of the registration (or filing or
renewal thereof) of this Indenture or any instrument ancillary or
supplemental hereto;
(c) the Trustee shall not be bound to give notice to any person or
persons of the execution hereof;
(d) the Trustee shall not incur any liability or responsibility
whatever or be in any way responsible for the consequence of any
breach on the part of the Company of any of the covenants or
warranties herein contained or of any acts of any director,
officer, employee or agent of the Company; ^
(e) the Trustee shall not be bound to give any notice or to do or take
any act, action or proceeding by virtue of the powers conferred on
it hereby unless and until it shall have been required so to do
under the terms hereof and the Trustee shall not be required to
take notice of any default of the Company hereunder unless and
until notified in writing of the default (which notice must specify
the nature of the default) and, in the absence of such notice, the
Trustee may for all purposes hereunder conclusively assume that no
default by the Company hereunder has occurred. The giving of any
notice shall in no way limit the discretion of the Trustee
hereunder as to whether any action is required to be taken in
respect of any default hereunder^;
(f) the Trustee shall not at any time be under any duty or
responsibility to any Warrantholder to determine whether any facts
exist which may require any adjustment contemplated by Article 5,
with respect to the nature or extent of any such adjustment when
made or with respect to the method used in making such adjustment;
(g) the Trustee shall not be accountable with respect to the validity
or value (or the kind or amount) of any shares or other securities
or property which may at any time be issued or delivered upon the
exercise of the rights attached to any Warrant; and
(h) the Trustee shall not be responsible for any failure of the Company
to make any cash payment or to issue, transfer or deliver Common
Shares or certificates therefor upon the surrender of any Warrants
for the purpose of the exercise of the rights attached to such
Warrants or to comply with any of the covenants contained in
Article 5.
10.8 Replacement of Trustee
10.8.1 The Trustee may resign its trust and be discharged from all further
duties and liabilities hereunder by giving to the Company not less
than 90 days' notice in writing or such shorter notice as the
Company may accept as sufficient The Warrantholders by
extraordinary resolution shall have power at any time to remove the
Trustee and to appoint a new Trustee. In the event of the Trustee
resigning or being removed as aforesaid or being dissolved,
becoming bankrupt, going into liquidation or otherwise becoming
incapable of acting hereunder, the Company shall forthwith appoint
a new Trustee unless a new Trustee has already been appointed by
the Warrantholders. Failing such appointment by the Company, the
retiring Trustee or any Warrantholder may apply to a Justice of the
Supreme Court of British Columbia, at the Company's expense, on
such notice as the Justice may direct, for the appointment of a new
Trustee. Any new Trustee so appointed by the Company or by the
Court shall be subject to removal by the Warrantholders as
hereinbefore provided. Any new Trustee appointed under any
provision of this section 10.8 shall be a corporation authorized to
carry on the business of a trust company in the Province of British
Columbia and, if required by the Applicable Legislation of any
other Province, in that other Province. On any appointment, the new
Trustee shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as
Trustee without any further assurance, conveyance, act or deed
(provided, however, there shall be immediately executed, at the
expense of the Company, all such conveyances or other instruments
as may, in the opinion of counsel, be necessary or advisable for
the purpose of assuring the same of the new Trustee).
10.8.2 Upon the appointment of a new Trustee, the Company shall promptly
give notice to the Warrantholders thereof.
10.8.3 Any corporation into or with which the Trustee may be merged or
consolidated or amalgamated, or any corporation succeeding to the
trust business of the Trustee, shall be the successor to the
Trustee hereunder without any further act on its part or any of the
parties hereto provided that the corporation would be eligible for
appointment as a new Trustee under subsection 10.8.1.
10.8.4 Any Warrants certified but not delivered by a predecessor Trustee
may be certified by the new or successor Trustee in the name of the
predecessor or new or successor Trustee.
10.9 Conflict of Interest
10.9.1 The Trustee represents to the Company that at the time of the
execution and delivery hereof no material conflict of interest
exists in the Trustee's role as a fiduciary hereunder and agrees
that in the event of a material conflict of interest arising
hereafter it will, within 90 days after ascertaining that it has a
material conflict of interest, either eliminate the same or resign
its trust hereunder.
10.9.2 Subject to subsection 10.9.1, the Trustee, in its personal or any
other capacity, may buy, lend upon and deal in securities of the
Company, may act as registrar and transfer agent for the Common
Shares and generally may contract and enter into financial
transactions with the Company or any subsidiary of the Company, all
without being liable to account for any profit made thereby.
10.10 Acceptance of Trust
The Trustee hereby accepts the trusts in this Indenture declared and provided
for, agrees to perform the same upon the terms and conditions herein set out
and agrees to hold all rights, interests and benefits contained herein for
and on behalf of those persons who become holders of Warrants from time to
time issued pursuant to this Indenture and for the Company, all as set out
herein.
10.11 Indemnification
Without limiting any protection or indemnity of the Trustee under any other
provision hereof or otherwise at law, the Company hereby agrees to indemnify
and hold harmless the Trustee from and against any and all liabilities,
losses, damages, penalties, claims, actions, suits, costs. expenses and
disbursements, including reasonable legal or adviser fees and disbursements,
of whatever kind and nature which may at any time be imposed on. incurred by
or asserted against the Trustee in connection with the performance of its
duties and obligations hereunder, other than such liabilities, losses damages
penalties claims actions suits, costs. expenses and disbursements arising by
reason of the negligence or fraud of the Trustee. This indemnity shall
survive the resignation or removal of the Trustee or the termination of this
Indenture. The Trustee shall not be under any obligation to prosecute or to
defend any action or suit at the instance of the Company which, in the
opinion of its counsel. May subject the Trustee to expense or liability
unless the Company shall, so often as required, furnish the Trustee with
satisfactory indemnity against or funding in respect of such expense or
liability.
11. GENERAL
11.1 Notice to Company and Trustee
11.1.1 Unless herein otherwise expressly provided, any notice to be given
hereunder to the Company or the Trustee shall be deemed to be
validly given if delivered or if sent by registered letter, postage
prepaid:
If to the Company:
Golden Queen Mining Co. Ltd.
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇
Attention: President
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇▇ - ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
If to the Trustee:
Montreal Trust Company of Canada
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇
Attention: Manager, Corporate Trust
and any notice delivered in accordance with the foregoing shall be
deemed to have been received on the date of delivery or, if mailed,
on the third business day following the day of the mailing of the
notice.
11.1.2 The Company or the Trustee, as the case may be, may from time to
time notify the other in the manner provided in subsection 11.1.1
of a change of address which, from the effective date of the notice
and until changed by like notice, shall be the address of the
Company or the Trustee, as the case may be, for all purposes of
this Indenture.
11.1.3 If, by reason of a strike, lockout or other work stoppage, actual
or threatened, involving postal employees, any notice to be given
to the Trustee or to the Company hereunder could reasonably be
considered unlikely to reach its destination, the notice shall be
valid and effective only if it is delivered to an officer of the
party to which it is addressed or if it is delivered to that party
at the appropriate address provided in subsection 11.1.1 by
telecopy or other means of prepaid, transmitted, or recorded
communication and any notice delivered in accordance with the
foregoing shall be deemed to have been received on the date of
delivery to the officer or if delivered by, telecopy or other means
of prepaid, transmitted, recorded communication, on the first
business day following the date of the sending of the notice by the
person giving the notice.
11.2 Notice to Warrantholders
11.2.1 Unless herein otherwise expressly provided, any notice to be given
hereunder to Warrantholders shall be deemed to be validly given if
the notice is sent by mail, prepaid, addressed to the holder or
delivered by hand (or so mailed to certain holders and so delivered
to other holders) at their respective addresses appearing on the
register maintained by the Trustee and if, in the case of joint
holders of any Warrants, more than one address appears on the
register in respect of that joint holding, the notice shall be
addressed or delivered, as the case may be, only to the first
address so appearing. No accidental error or omission in giving
notice or accidental failure to give notice to any Warrantholder
shall invalidate any action or proceeding founded thereon.
11.2.2 If, by reason of strike, lock-out or other work stoppage, actual or
threatened, involving postal employees, any notice to be given to
the Warrantholders could reasonably be considered unlikely to reach
its destination, the notice may be published or distributed once in
the Report on Business section of the National edition of The Globe
and Mail newspaper, or, in the event of a disruption in the
circulation of that newspaper, once in a daily newspaper in the
English language approved by the Trustee of general circulation in
each of the cities of Vancouver and Toronto; provided, however,
that in the case of a notice convening a meeting of the holders of
Warrants, the Trustee may require such additional publications of
that notice, in the same or in other cities or both, as it may deem
necessary for the reasonable protection of the holders of Warrants
or to comply with any applicable requirement of law or any stock
exchange. Any notice so given shall be deemed to have been given on
the day on which it has been published in all of the cities in
which publication was required (or first published in a city if
more than one publication in that city is required). In
determining, under any provision hereof, the date when notice of
any meeting or other event must be given, the date of giving notice
shall be included and the date of the meeting or other event shall
be excluded.
11.3 Satisfaction and Discharge of Indenture
Upon the date by which Common Shares shall have been delivered to
Warrantholders to the full extent of the rights attached to all Warrants
theretofore certified hereunder and the monies to be paid hereunder have been
paid, this Indenture shall cease to be of further effect, and on demand of
and at the cost and expense of the Company and upon delivery to the Trustee
of a certificate of the Company stating that all conditions precedent to the
satisfaction and discharge of this Indenture have been complied with and upon
payment to the Trustee of the fees and other remuneration payable to the
Trustee, the parties hereto shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture.
11.4 Sole Benefit of Parties and Warrantholders
Nothing in this Indenture or in the Warrants, expressed or implied, shall
give or be construed to give to any person other than the parties hereto and
the Warrantholders any legal or equitable right, remedy or claim under this
Indenture, or under any covenant or provision therein contained, all such
covenants and provisions being for the sole benefit of the parties hereto and
the Warrantholders.
11.5 Counterparts and Formal Date
This Indenture may be simultaneously executed in several counterparts, each
of which when so executed shall be deemed to be an original and the
counterparts together shall constitute one and the same instrument and
notwithstanding their date of execution shall be deemed to bear date as of
May 23, 1996.
IN WITNESS WHEREOF the parties hereto have executed these presents under
the hands of their proper officers in that behalf.
GOLDEN QUEEN MINING CO. LTD.
By: ______________________________
______________________________
MONTREAL TRUST COMPANY OF CANADA
By: ______________________________
______________________________
SCHEDULE A
WARRANTS
TO ACQUIRE COMMON SHARES OF
GOLDEN QUEEN MINING CO. LTD.
(Incorporated under the laws of British Columbia)
WARRANT CERTIFICATE Certificate for warrants,
each entitling the holder to acquire
NO. one common share in the capital of
Golden Queen Mining Co. Ltd.
THIS IS TO CERTIFY THAT, for value received,
(herein called the "holder") is entitled to receive in the manner herein
provided and without further payment therefor, subject as hereinafter
provided, one fully paid and non-assessable common share in the capital of
Golden Queen Mining Co. Ltd. (the "Company") for each of the warrants (the
"Warrants") evidenced by this certificate.
The Warrants represented by this Warrant Certificate are issued under and
pursuant to a Warrant indenture (herein called the "Indenture") made as of
May 23, 1996 between the Company and Montreal Trust Company of Canada (the
"Trustee"), to which Indenture and any instruments supplemental thereto
reference is hereby made for a full description of the rights of the holders
of the Warrants and the terms and conditions upon which Warrants are, or are
to be, issued, held, exchanged and surrendered, all to the same effect as
if.the provisions of the Indenture and all instruments supplemental thereto
were herein set out, and to all of which provisions the holder of these
Warrants evidenced hereby by acceptance hereof assents. In the event of any
conflict between the provisions of this Warrant Certificate and the
provisions of the Indenture, the provisions of the Indenture shall prevail
and govern. Capitalized terms used in this Warrant Certificate and not
otherwise defined shall have the meanings ascribed to them in the Indenture.
The Warrants are exercisable at any time prior to 4:00 p.m. ^(Vancouver time)
on November 28, 1997 (the "Time of Expiry").
The Warrants represented by this Warrant Certificate may be exercised by the
holder at any time prior to the Time of Expiry by:
a) duly completing and executing the exercise form attached to this
Warrant Certificate;
b) delivering to the Trustee a certified cheque or recognized bank
draft payable to or to the order of the Company for the
subscription price of $2.9(: for each Common Share to be acquired;
and
c) surrendering this Warrant Certificate to the Trustee at the
principal transfer office of the Trustee in either of the cities of
Vancouver, British Columbia [or Toronto, Ontario].
If the Warrants represented by this Warrant Certificate have not been
exercised prior to the Time of Expiry, all rights under the Warrants
represented hereby shall wholly cease and terminate and the Warrants shall be
void and of no effect.
The Indenture provides for adjustments to the right of subscription,
including the amount of and class and kind of securities or other property
issuable upon exercise, upon the happening of certain stated events,
including the subdivision or consolidation of the Common Shares, certain
distributions of Common Shares or securities convertible into Common Shares
or of other securities or assets of the Company, certain offerings of rights,
warrants or options and certain capital reorganizations.
The holder of this Warrant Certificate may upon surrender hereof to the
Trustee at its principal transfer office in either of the cities of
Vancouver, British Columbia [or Toronto, Ontario] exchange this Warrant
Certificate for other Warrant Certificates evidencing Warrants entitling the
holder to receive in the aggregate the same number of Common Shares as may be
acquired pursuant to the Warrants evidenced by this Warrant Certificate.
The holding of the Warrants evidenced by this Warrant Certificate shall not
constitute the holder hereof a shareholder of the Company or entitle the
holder to any right or interest in respect thereof except as herein and in
the Indenture expressly provided.
The Indenture contains provisions making binding upon all holders of Warrant
Certificates resolutions passed at meetings of such holders held in
accordance with such provisions and instruments in writing signed by the
holders of Warrants entitled to acquire a specified percentage of the Common
Shares which may be acquired pursuant to all of the then outstanding Warrant
Certificates.
The Warrants evidenced by this Warrant Certificate may only be transferred in
accordance with applicable securities laws, the rules of the stock exchanges
upon which the Common Shares are listed and upon executing the transfer form
attached to this certificate and, subject thereto, may be transferred on the
register kept at the offices of the Trustee by the holder hereof or his legal
representatives or his or their attorney duly appointed by an instrument in
writing in form and execution satisfactory to the Trustee only upon
compliance with the conditions prescribed in the Indenture and upon
compliance with such reasonable requirements as the Trustee may prescribe.
This Warrant Certificate shall not be valid for any purpose whatever unless
and until it has been countersigned by or on behalf of the Trustee.
The registered holder of this Warrant Certificate expressly acknowledges
having requested, and consents to, the drawing in the English language only
of this Warrant Certificate evidencing the Warrants registered in its name
and all documents relating to such Warrants. Le detenteur inscrit du present
certificat de bons de souscription reconnait expressement avoir demande et
consenti que le present certificat attestant qu'il est le detenteur inscrit
de bons de souscription, ainsi que tous les documents s'y rapportant, soient
rediges en anglais seulement.
Time shall be of the essence hereof.
This Warrant Certificate shall be governed by and construed in accordance
with the laws of the province of British Columbia.
IN WITNESS WHEREOF the undersigned has caused this Warrant Certificate to be
duly executed as of the 23rd day of May, 1996.
GOLDEN QUEEN MINING CO. LTD.
By: ______________________________
Authorized Officer
Countersigned by:
MONTREAL TRUST COMPANY OF CANADA
By: ______________________________
Authorized Officer
LEGEND
^ THE WARRANTS REPRESENTED HEREBY AND THE COMMON SHARES ISSUABLE UPON
EXERCISE ^ THEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933 (THE "U.S. SECURITIES ACT") OR THE SECURITIES LAWS OF
ANY STATE. ^ SUCH WARRANTS MAY BE EXERCISED ONLY BY A PERSON WHO (I) IS NOT
IN THE UNITED STATES OR A U.S. PERSON AND IS NOT EXERCISING THIS WARRANT FOR
THE ACCOUNT OR BENEFIT OF OR FOR RESALE TO A U.S. PERSON OR A PERSON IN THE
UNITED STATES AND WHO PROVIDES A WRITTEN REPRESENTATION TO SUCH EFFECT, OR
(II) PROVIDES AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY TO THE EFFECT
THAT SUCH COMMON SHARES ARE REGISTERED UNDER THE U.S. SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS, OR EXEMPTIONS FROM REGISTRATION ARE
AVAILABLE. A QUALIFIED INSTITUTIONAL BUYER ^(AS DEFINED IN RULE 144A ^ UNDER
THE U.S. SECURITIES ACT) ^ THAT WAS ISSUED ^ THE WARRANTS REPRESENTED HEREBY
UPON EXERCISE OF SPECIAL WARRANTS OF THE COMPANY PURCHASED BY SUCH HOLDER
FROM ^ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & PARTNERS (USA), INC. ^ ON OR ABOUT MAY 23, 1996^ IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PURSUANT
TO RULE 144A THEREUNDER OR AN ACCREDITED INVESTOR (AS DEFINED IN REGULATION D
UNDER THE U.S. SECURITIES ACT) THAT WAS ISSUED THE WARRANTS REPRESENTED
HEREBY UPON EXERCISE OF SPECIAL WARRANTS OF THE COMPANY PURCHASED BY SUCH
HOLDER FROM THE COMPANY ON OR ABOUT MAY 23, 1996 IN A TRANSACTION EXEMPT FROM
REGISTRATION UNDER THE U.S. SECURITIES ACT PURSUANT TO SECTION 4(2)
THEREUNDER SHALL NOT BE REQUIRED TO DELIVER AN OPINION OF COUNSEL IN
CONNECTION WITH THE EXERCISE OF ^ THE WARRANTS REPRESENTED HEREBY.^
[Insert any additional legends ^ required under the Warrant Indenture]
TRANSFER OF WARRANTS
FOR VALUE RECEIVED, the undersigned transferor (the "Transferor") hereby
sells, assigns and transfers unto
__________________________________________________________ (the "Transferor")
(Name)
_____________________________________________________________________________
(Address)
the Warrants registered in the name of the undersigned represented by this
Warrant Certificate. ^
The Transferee, by executing this instrument, agrees to be bound by the
terms of the Indenture, and
Check One
[ ] represents and warrants to and for the benefit of Golden Queen Mining
Co. Ltd. (the "Company"), the Trustee and the Transferor that the
Transferee (i) is not a U.S. Person or a person in the United States, or
acquiring the Warrants for the account or benefit of, or for resale to,
a U.S. Person or a person in the United States; (ii) was not offered the
Warrants in the United States, and (iii) did not exercise or deliver
this transfer form or other order to purchase the Warrants in the United
States. "United States" and "U.S. Person" are used herein as defined in
Regulation S under the United States Securities Act of 1933, as amended.
[ ] has included herewith evidence of compliance with the restrictions on
transfer set out in ^the Indenture, it being understood that no transfer
shall be effective unless and until such evidence is found to be
satisfactory to the Company^.
DATED the _____ day of _____________, 199_.
______________________________ ______________________________
Signature Guaranteed (Signature of Transferor)
______________________________ ______________________________
Witness (Signature of Transferee)
EXERCISE FORM
TO: GOLDEN QUEEN MINING CO. LTD.
AND TO: MONTREAL TRUST COMPANY OF CANADA
The undersigned holder of the ^ Warrants represented by this Warrant
Certificate hereby exercises the right provided for in the Warrants to
receive _______________ Common Shares in the capital of Golden Queen Mining
Co. Ltd. issuable pursuant to the Warrants and encloses the amount of $2.90
per Common Share (or the adjusted dollar amount per share at which the
undersigned is entitled to purchase such shares under the Indenture) by way
of certified cheque or recognized bank draft made payable to or to the order
of the Company.
The undersigned hereby irrevocably directs that such Common Shares be
issued and delivered as follows:
Number(s) of
Name(s) in Full Address(es)* Common Shares
_______________ _______________ _______________
_______________ _______________ _______________
_______________ _______________ _______________
(Please print in full the name in which certificates are to be issued. If any
of the securities are to be issued to a person or persons other than the
Warrantholder, the Transfer of Warrants should be endorsed and the
Warrantholder must pay to the Trustee all exigible transfer taxes or other
government charges.)
Check One:
[ ] The Undersigned represents and warrants to the Company and the Trustee
that the Undersigned is not in the United States or a U.S. Person or
exercising the Warrants represented by this Certificate for the account
or benefit of or for resale to, a U.S. person or person in the United
States. "United States" and "U.S. Person" are used herein as defined in
Regulation S under the United States Securities Act of 1933.
[ ] The Undersigned is ^ an Accredited Investor (as defined in ^ Regulation
D^ under the United States Securities Act of 1933) ^ that was issued the
Warrants represented by this Warrant Certificate pursuant to the
exercise of Special Warrants which the undersigned purchased from ^ the
Company or is a Qualified Institutional Buyer (as defined in Rule 144A
under the United States Securities Act of 1933) that was issued the
Warrants represented by this Warrant Certificate pursuant to the
exercise of Special Warrants which the undersigned purchased from ▇▇▇▇▇▇
▇▇▇▇▇▇▇ & Partners (USA), Inc.^, in either case on or about May 23, 1996
in a transaction exempt from registration under the United States
Securities Act of 1933.
[ ] The Undersigned is delivering herewith an opinion of counsel to the
effect that the Common Shares issuable upon exercise hereof are
registered under the United States Securities Act of 1933 and applicable
state securities laws or exemptions from such registration are
available, it being understood that securities issuable upon exercise
hereof will not be delivered unless and until such opinion is found to
be satisfactory to the Company.
DATED this ______ day of _____________, 199_.
______________________________ ______________________________
Witness Signature of Holder
______________________________
Name of Holder
______________________________
______________________________
Address of Holder
* Certificates will not be registered at or delivered to an address in the
United States without an opinion of counsel that the Common Shares are
registered under the U.S. Securities Act and applicable state securities laws
or exemptions from such registration are available, except in connection with
an exercise by a person who checks the second box above on this Exercise
Form.
[ ] Please check box if these certificates are to be delivered to the office
where this Warrant Certificate is surrendered, failing which the
certificates will be mailed to the address shown on the register.